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bockbockchickenhead t1_j6nfn21 wrote

Reply to comment by DeluxeXL in Optima says my dad owes $40k in back taxes?! by [deleted]

Income tax afaik. I don’t know the full details as I’m not authorized to talk to optima directly.

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meamemg t1_j6ngh18 wrote

If he made about $80k per year, that would be about $6k in federal income tax and $12,000 in self employment (FICA; medicare/social security) taxes. So if that is about his income it sounds right. If he never filed then interest and penalties could be a significant part of the $20k, so you could owe that much even with significantly less income.

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buried_lede t1_j6nv40s wrote

So many business deductions. In those years I believe 100-percent of health insurance premiums could be deducted and on personal taxes the house mortgage deduction etc. Mileage on the trucks, all the costs. Tons of deductions for a trucking co. Hope they captured all of those. Office too, including home office space

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ahj3939 t1_j6ob4sr wrote

So the main thing he needs to do is find all his expenses for those years.

Because what is likely happening IRS gets a 1099 showing $150k revenue

But of that $150k he spent $100k on gas, vehicle maintenance. IRS lets you write off something like half of meals 50+ miles from home, etc.

But IRS doesn't know that. They just see $150k and send a massive tax bill for the full amount. He needs to adjust that and take all the deductions he can. This reduces the amount of tax, and then it reduces the amount of penalty and interest.

Make sure also they aren't reporting too much income IRS doesn't know about. If they say he has a tax debt they should send him the tax forms they prepare. Probably the part "Schedule C" is the main focus. Go over it with your dad and see it if makes senbse.

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